Air Traffic Is Up and So Are Oil Prices
Air traffic continues to increase, says the International Air Transport Association, with passenger traffic up 8.2% in January, better than December, when severe weather in Europe and North America slowed the recovery. January´s air travel volumes were 18 percent higher compared to the low point reached in early 2009 and some 6% above the prerecession peak of early 2008.
The problem with this otherwise rosy picture? Oil prices. The industry´s current forecasts were based on $84 per barrel oil and that price is now up to more than $100, said Giovanni Bisignani, IATA´s director general and CEO. A $1 increase in the price of oil means the industry has to recover $1.6 billion in additional costs. Bottom line? It´s another challenging year for airlines. (Source: IATA press release).
Airlines Test the Waters With Fare Increase
Early last month, several carriers initiated fuel surcharges that ranged from $4 to $10, according to airfare comparison website FareCompare.com.
Except for some peak travel miscellaneous surcharges for popular travel periods, U.S. consumers haven´t seen domestic fuel surcharges since November 2008, according to Rick Seaney, FareCompare´s CEO. And airlines continue to try hiking fares. Late last month legacy carriers tried a $20 fare hike but ultimately cut that in half when low-cost carriers countered with a $10 fare hike. (Source: FareCompare.com).
American Fined for Charging Bumped Passengers a Fee
Read the fine print if you volunteer to give up your seat on an overbooked flight. The Federal Aviation Administration has fined American Airlines $90,000 for failing to disclose that vouchers given to passengers who voluntarily gave up their seats on oversold flights could be redeemed only after paying a ticketing fee of as much as $30.
Airlines have to look for volunteers before involuntarily bumping passengers, when the Department of Transportation requires the airlines to pay travelers cash in most cases. Ray LaHood, US Transportation secretary, said that if you give up your seat, you deserve full compensation—and not find out later that they have to pay $30 to use it. (Source: DOT press release).
Major Carriers Tout Service into Tokyo´s Haneda Airport
Carriers are adding flights to Tokyo´s Haneda Airport, located near Tokyo´s business center, even as they maintain service to the larger—and more distant—Narita. Delta Air Lines is now flying between Tokyo Haneda and Detroit and Los Angeles.
American Airlines has also begun flying nonstop between JFK and Haneda. The new service is a result of the Open Skies Agreement that the U.S. and Japan signed in October. U.S. carriers aren´t the only airlines flying into the more conveniently located Haneda; British Airways launched its new route to Haneda in Japan on Feb. 19. (Source: American, British Airways, Delta press releases).
Low Cost Carriers Add Workers & Network Carriers Cut Them
Low-cost carriers reported an increase in fulltime employees in December, the latest figures available, while network carriers reported fewer, according to the Department of Transportation.
The result was that the number of fulltime employees for passenger airlines increased .2%. It´s a major turnaround for the industry, which saw employee numbers drop for the 28 months up until November 2010, when there was no change. (Source: DOT press release).